Gauge of Stock Value Is Tricky to Apply Overseas

The popular Shiller P/E ratio may not easily translate to foreign markets

A popular method of gauging stock prices, developed by Yale economist and Nobel Prize winner Robert Shiller, indicates that the U.S. market may be getting expensive—and suggests that many other countries look comparatively cheap.

Investors interested in foreign markets have noticed the gaps. But those who apply Mr. Shiller's measure across borders could run into trouble, experts say, because some nuances can get lost in...